More and more tourists visiting Hong Kong from mainland China are taking advantage of great benefits and higher returns offered by local insurance providers. Mainlanders spent HKD 15 billion worth of insurance products in Hong Kong last year. As much as 16% of new life insurance sold in the territory in the said period is bought by mainland tourists—up from 13% in 2012 and 9% in 2011.
Good or Bad: High Demand of Insurance in Hong Kong
A Time Magazine article in 2008 named Hong Kong part of the “Nylon Kong,” a portmanteau coined from the names of three different cities: New York City, London, and Hong Kong. These cities form a global network that has direct contributions to the acceleration of the global economy.
Chan Kin-por, legislator for the insurance industry, explained that mainlanders had become an important source of business for Hong Kong-based life insurance companies.
He said in an interview that people don’t just come to HK for cosmetic products or jewelry. Most people come to the city also to buy life insurance products. He added, “This is because the insurance products offered here have more features and higher returns compared with what are on offer across the border.”
While the positive interest in the industry is obviously a good sign for insurance providers and will inevitably bolster the local economy, experts are concerned that if sales aren’t handled properly, it could likewise result in an increase in complaints.
Mainlanders Coming to HK for Insurance
Insurance agents from Hong Kong are restricted from selling any products on the mainland. The mainlanders have no choice but to come to HK and buy policies from agents or banks. The Mainland tourists’ share of new life insurance has increased progressively, from 4% in 2010 to 9% in 2011. Last year, the upwards trend reached 16%, up from 13% in 2012.
The people usually buy savings-type life insurance policies. These generally deliver 4 to 5% annual returns – higher than mainland policies offered with only 1 to 2% returns.
Know Where to Buy Insurance, the Hassle-Free Way
Chan said, “It’s good that our insurers can sell to mainlanders. However, we also need to be aware of the risks involved, as many mainlanders are buying the policies during short trips here. It would be a problem if the agents or the bank staff do not get the time to fully disclose the risks or product features to them. Some mainland tourists could complain in future.” These concerns make it even more prudent for potential insurance buyers to always know where to buy and which products to choose so they can make smart decisions.
Mainlanders can buy insurance policies in Hong Kong even without going there. MoneyHero allows buyers to compare a comprehensive list of available insurance policies in HK, free and easy.